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Surety bonds are presumed to carry zero risk for the surety company issuing them. The bond stipulates the agreement details between the principal, surety company, and obligee, including payout amounts for claims. However, reimbursement details from the principal to the surety are generally not included in the bond itself. The surety's ability to issue bonds confidently without incurring losses relies on an indemnity agreement. This is a two-party contract where the indemnitor (principal) assumes risk, while the indemnity (surety company) is protected from liability. Thus, an indemnity agreement is essential in managing the risk associated with surety bonds.